Correlation Between PureCycle Technologies and Amerigo Resources

Can any of the company-specific risk be diversified away by investing in both PureCycle Technologies and Amerigo Resources at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PureCycle Technologies and Amerigo Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PureCycle Technologies and Amerigo Resources, you can compare the effects of market volatilities on PureCycle Technologies and Amerigo Resources and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PureCycle Technologies with a short position of Amerigo Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of PureCycle Technologies and Amerigo Resources.

Diversification Opportunities for PureCycle Technologies and Amerigo Resources

-0.07

Correlation Coefficient

PureCycle Technologies  Amerigo Resources

Good diversification

The 3 months correlation between PureCycle and Amerigo is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding PureCycle Technologies and Amerigo Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amerigo Resources and PureCycle Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PureCycle Technologies are associated (or correlated) with Amerigo Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amerigo Resources has no effect on the direction of PureCycle Technologies i.e., PureCycle Technologies and Amerigo Resources go up and down completely randomly.

Pair Corralation between PureCycle Technologies and Amerigo Resources

Assuming the 90 days horizon PureCycle Technologies is expected to generate 3.9 times more return on investment than Amerigo Resources. However, PureCycle Technologies is 3.9 times more volatile than Amerigo Resources. It trades about 0.2 of its potential returns per unit of risk. Amerigo Resources is currently generating about -0.01 per unit of risk. If you would invest  200.00  in PureCycle Technologies on September 12, 2024 and sell it today you would earn a total of  268.00  from holding PureCycle Technologies or generate 134.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

PureCycle Technologies  vs.  Amerigo Resources

PureCycle Technologies

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PureCycle Technologies are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, PureCycle Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Amerigo Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amerigo Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Amerigo Resources is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PureCycle Technologies and Amerigo Resources

The main advantage of trading using opposite PureCycle Technologies and Amerigo Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PureCycle Technologies position performs unexpectedly, Amerigo Resources can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Amerigo Resources will offset losses from the drop in Amerigo Resources' long position.

The idea behind PureCycle Technologies and Amerigo Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.